I am just flying home from Chicago, where I had the opportunity to spend the past week with my fee-only advisor colleagues at the 2012 NAPFA National Conference. I had a great time and learned a lot too. Here are some of the highlights:
- William Strauss, senior economist with the Federal Reserve Bank of Chicago, said that while “growth of GDP has been 2.1% over the last 12 months, the economy feels lousy” because our unemployment rate is still over 8%. Economic recovery is usually driven by pent-up consumer demand, but Strauss said that demand has not materialized as it has in the past. Banks are holding financial reserves well in excess of federal requirements. He said that we “still have excess capacity of existing homes, and businesses of all types see a shaky rise in demand” that isn’t safe for investment. Adding to the problem is the overall loss of consumer wealth that can be tied to the bursting of the housing bubble. When the bubbled burst, it eliminated $7 trillion in housing value, said Strauss. Even people who homes were fully paid were affected by losses in their net worth, and they have cut spending as a result.
- Tom Nally, President of TD Ameritrade Institutional, spoke on some of the emerging trends that will change and challenge the RIA Industry. He emphasized the importance of technology and moving towards cloud-based solutions.
- Austan Goolsbee, former member of the President’s Council of Economic Advisors, said the U.S. economy “compares favorably to Europe and other developed economics on many angles.” The U.S. still has a strong entrepreneurial culture. “The innvative capacity of the economy is vitually unbounded,” he said.
About Christopher M. Jones, CFP®
Christopher M. Jones is the Founder and President of Sparrow Wealth Management, a fee-only financial planning and investment management firm based in Hermosa Beach, CA. Before entering the investment field, Chris was a management consultant for Deloitte Monitor. He graduated summa cum laude from Brigham Young University with a B.S. in Economics and a minor in Business Management. Chris is a CERTIFIED FINANCIAL PLANNERTM practitioner.